Pilgrim’s Pride in takeover bid for Hillshire

Weakening sales of its meat products had led Hillshire Farms to reach a deal for frozen foods.

* Pilgrim's Pride offers $5.58 billion for company in quest to become a "protein leader"

NEW YORK — Pilgrim's Pride launched a takeover bid Tuesday for Hillshire Brands, looking to expand its business beyond fresh and frozen chicken into a variety of packaged meats, including Ball Park hot dogs and Jimmy Dean sausages.

The $5.58 billion offer could derail Hillshire's plans to buy Pinnacle Foods, which makes Birds Eye frozen vegetables, Duncan Hines cake mixes and Hungry Man frozen dinners. Hillshire had announced that $4.23 billion deal this month as a way to expand into different parts of the supermarket.

But Pilgrim's Pride said its offer of $45 per share for Hillshire was "substantially superior" and would allow the companies to cut costs by merging some operations and become a "protein leader" that sells more types of meat.

It said it would pay the $163 million termination fee required to end the Pinnacle Foods deal.

"As you are well aware, it has long been our desire to acquire the company," Pilgrim's said in a public letter to Hillshire CEO Sean Connolly.

In a statement, Chicago-based Hillshire said it continues to strongly believe in the "strategic merits and value creation potential" of its deal for Pinnacle. It said it would review the Pilgrim's proposal as part of its fiduciary duties.

Pilgrim's Pride, with Brazilian meat company JBS as its majority owner, wants to focus more heavily on branded products, which are more profitable than selling private-label meats to supermarkets and food-service outlets.

Hillshire has been struggling with weak sales and looking for ways to boost its results, including by focusing on products that aren't made up entirely of meat, such as its Jimmy Dean breakfast sandwiches.